Measuring inequalities in health in the presence of multiple‐category morbidity indicators

This paper considers the problems which arise in seeking to measure socioeconomic inequalities in health when the health indicator is a categorical variable, such as self‐assessed health. It shows that the standard approach—which involves dichotomizing the categorical variable—is unreliable. The degree of measured inequality is found to depend on the cut‐off point chosen and the choice of cut‐off point to affect the conclusions one can reach about trends in or differences in health inequality. The paper goes on to propose an alternative approach which involves constructing a latent health variable and then measuring inequalities in this latent variable by means of a variant of the health concentration curve.